next steps for new labour -...

LIAM BYRNE • JAMES PURNELL • MATTHEW TAYLOR

Power to the peopleNext steps for New Labour

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Power to the peopleNext steps for New Labour

Honorary President: Rt Hon Alan Milburn MPChair: Stephen TwiggVice chairs: Andy Burnham MP,Ed Miliband MP, Baroness Delyth Morgan,Meg Munn MP,Tony RobinsonPatrons: Wendy Alexander MSP, DouglasAlexander MP, Rt Hon Hazel Blears MP,YvetteCooper MP, Rt Hon John Denham MP, ParmjitDhanda MP, Rt Hon Peter Hain MP, John HealeyMP, Rt Hon Beverley Hughes MP, Rt Hon JohnHutton MP, Maggie Jones, Glenys Kinnock MEP,Sadiq Kahn MP, Rt Hon Peter Mandelson MP,Rt Hon David Miliband MP,Trevor Philips,Margaret Prosser, James Purnell MP,Jane Roberts, Lord David Triesman,Kitty Ussher MP, Martin WinterSecretary: Patrick DiamondHonorary Treasurer:Baroness Margaret JayDirector: Robert PhilpotDeputy Director: Jennifer GerberPublications Officer: Mark DayEvents and Research Officer: Neil LevitanAdministrative Assistant: Wes Streeting

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IntroductionRobert Philpot

Fairness and freedomLiam Byrne

The enabling stateJames Purnell

Empowerment: a Labour vision for public services

Matthew Taylor

Contents

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Introduction

Throughout the 20th century, the Conservative party exhibited a capacity for reinvention, pragmatism and an overwhelming desire to acquire and retain political power which rested at the heart of thephenomenal electoral success that the party enjoyed from the timeLord Salisbury took office in 1886 to the moment John Major left it

111 years later. During this period, alone or as the dominant partner in acoalition government, the Tories managed to hold office for 80 years.

Thus, as remarkable as the Conservatives’ defeat in 1997 was, what wasreally unique about it during Labour’s first two terms was the absence of theTories’ key traditional strength: that ‘grand sense of where the votes are,’ as Enoch Powell famously put it 20 years ago.

The emergence of David Cameron on the national political scene and hiselection as Tory party leader suggests that the Tories may be about to recoverthis hitherto defining trait. In this Progress pamphlet, Liam Byrne and JamesPurnell offer an early analysis of Cameron’s likely strategy, while MatthewTaylor joins them in calling for a Labour response founded on the principle of empowerment.

Promising a ‘new, modern, compassionate conservatism’, Cameron hasspent the weeks since he became Tory party leader energetically attempting to place himself in the centre ground which Labour has so successfullyoccupied since the mid-1990s. Cameron has affected a concern with issueswhich the Tories long ago appeared to abandon any interest in; appointed some fresh and unexpected faces to his new policy commissions; and, perhapsmost disingenuously, ripped up much of the Conservatives’ general electionmanifesto – a document which he not only campaigned on less than a yearago, but was the principal author of.

Cameron’s bid for the centre ground may appear haphazard: what common ground will eventually unite the findings of Zac Goldsmith’senvironment commission and John Redwood’s review of Tory economicpolicy? It is also unclear how far the Tories will allow Cameron to go if he is so inclined. Unlike Tony Blair and Gordon Brown in 1994, Cameron inheritsno reformist mantle from his predecessors. While the momentum for changeand renewal in the Labour party was well under way – and enjoyed broad-based support – by the time Tony Blair became leader, few objective observerscould claim the same of today’s Tory party.

James Purnell underlines the tension inherent in Cameron’s approach. It’s worth noting, he suggests, the odd choice of personnel – Iain DuncanSmith, Michael Forsyth, and Peter Lilley – Cameron has made to lead his policy groups. ‘Cameron may come to regret having entrusted the task ofburying Thatcherism to its political heirs,’ writes Purnell.

The new Tory leader’s tactics are, of course, hardly novel. While much has

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been made of the manner in which Cameron is attempting to imitate thecreation of New Labour in the mid-1990s, the real parallel, as Liam Byrneargues, is with George W Bush’s successful recasting of himself as a ‘differentkind of conservative’ in the run-up to the 2000 US presidential election. As Byrne details, President Bush’s time in office suggests that, while the rhetoricmay have been ‘modern Conservative’, the reality has been very different: taxcuts for the rich, sharp cuts in public investment, and rising unemployment andpoverty levels.

Cameron’s centrist rebranding exercise is, however, likely to be allied with a new line of attack on Labour. As Byrne suggests, part of Cameron’s strategywill be ‘a calculated effort to redefine the Labour government in the minds ofthe public as a statist Leviathan out of touch with the aspirations of modernBritain.’ The thrust of this attack, it appears, will be focused on civil liberties,‘centralisation’, public spending, and ‘regulation’. The Tory leader’s purpose,moreover, is clear: to create, in time for the 2009 election, a ‘Tory-shapedproblem that is holding Britain back’.

Labour’s response to this two-faceted Tory strategy – the rhetorical shift to the centre and the likely Conservative line of attack – should be equally clear.First, the party must remain firmly wedded to the centre ground, exposing theflip-flops and lack of coherence that is already becoming apparent in Cameron’sattempt to reach it. Second, Labour must offer an alternative vision of the role ofthe state to that which ‘modern Conservatives’ offer. This does not, of course,mean that Labour should become the defender of the ‘big state’ which Cameronwill attempt to caricature. Instead, the party should, as Purnell puts it, argue forthe importance of the ‘flexible enabling state’, one which seeks to give power toindividuals and communities.

Central to this vision of the empowering state is the role of public services,the focus of Matthew Taylor’s contribution to this pamphlet. The notion thatpublic service reform should attempt to empower citizens is not without critics.Most crucially for Labour, some believe that it inevitably favours the middle classto the disadvantage of the less well off. However, as Taylor argues, this chargeignores the fact that ‘better off people have always and continue to get the bestout of the system’ and it underestimates ‘the ways in which empowermentstrategies can be targeted in particular at less privileged groups’.

Positing the empowering state as a response to David Cameron’s conceptionof the small state has obvious political appeal. But it is also provides Labour witha powerful progressive message about widening access to power andopportunity. As Taylor suggests, it also offers:

The opportunity to overcome the great 20th century flaw in British progressive politics. Thisis the divide between the advocates of equality through distribution of resources and advocatesof empowerment through the dispersal of power. By bringing empowerment to the aid ofpublic services and by using public services to empower, I think we have the opportunity todevelop a more powerful political and policy paradigm.

ROBERT PHILPOT is director of Progress

Power to the people Next steps for New Labour6

Fairness and freedom

For many voters at the next election, the Major government will be a faint memory and the name ‘Thatcher’ will be more closely associated with reality TV shows. So, when voters hear DavidCameron’s ‘compassionate Conservative’ message, ‘compassion’ willbe a word they understand. But the word ‘Conservative’ will be

more of an enigma. Our task will be to help translate it, and contrast it to aforward-looking Labour agenda that helps every corner of our country getthe best out of life, in a 21st century Britain richer in opportunity than for ageneration.

Pinning Cameron down in the immediate months to come is not goingto be especially easy, as he is now making policy in the manner that many ofus choose lottery numbers. After each weekly draw he scrabbles for a pen toconstruct another combination that might be more successful than the ticketthat didn’t work in the previous news-cycle. Not surprisingly, the public is beginning to think he is a politician who ‘will do anything to win’ and‘doesn’t know what he believes’.

In the past month we have seen the sudden demise of the patients’ passport (written into the manifesto by Cameron himself eight months ago); a new policy of targets for carbon reduction but an emphatic rejection oftargets for anything else like crime reduction or falls in NHS waiting lists;and a new and confused picture on education.

Having suggested in the Spectator1, the Evening Standard2, and on theToday programme3 that education by selection is alright, Cameron went onto argue, in a speech on January 9 2006, that there would be ‘no return tothe 11-plus’. The pupils’ passport, meanwhile, is not rejected but is underreview4. So that’s clear.

But, like many a gambling addict, there is in fact a method to the wayCameron is trying to place his bets. It comes in two parts. Part one is tofiercely construct a brand for himself as ‘a different kind of Conservative’.Part two is a calculated effort to redefine the Labour government in theminds of the public as a statist Leviathan, out of touch with the aspirationsof modern Britain.

Task one for Labour over the months to come must be to steadily exposeeach and every line item in Cameron’s new ledger. Not least because theevidence we have suggests that, on closer inspection, much may turn out tobe ‘new gloss on old philosophy’, as Ed Miliband put it at a recent Progress

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1 The Spectator, September 27 20052 Evening Standard, October 18 20053 The Today programme, BBC Radio 4, December 9 20064 http://politics.guardian.co.uk/conservatives/story/0,9061,1682969,00.html

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event. The last conservative to successfully seek election as a ‘different kind of Conservative’ was, of course, George W Bush. A brief survey of the Bush election campaign and the ensuing results reveals that, while the rhetoric was indeed ‘modern Conservative’, the reality was very much‘new right’ – with results that sound all to familiar: tax cuts for thewealthiest, rising unemployment and a weaker safety net for the mostvulnerable.

While Cameron apparently refuses to hold meetings in the Thatcherroom at Portcullis house, Bush tried to distance himself from the Reaganlegacy and promote the nice idea that he was not the same but a break in the Republican tradition. The Bush website was jammed withcompassionate quotes about the candidate, stressing health and fitness and a ‘compassion photo album’ stuffed with pictures of Bush amidst great swathes of underprivileged ethnic minority children. At everyopportunity, the Bush brand was touted as ‘a different type ofRepublicanism’.

But, if the US Republicans are anything to go by, when the Tories saythey want to ‘share the fruits of economic growth’, they are unlikely tomean with families most in need. In his 2001 budget, Bush set out hisambitions in a very similar way to Cameron’s recent commitment to sharethe proceeds of growth between tax reduction and public investment5. Bush put it simply: ‘The people of America have been overcharged and on their behalf I’m here asking for a refund.’5 The tax cuts that followedtotalled 50-times the amount requested for new education spending. They ended up not in the pockets of the bottom 60 per cent of Americanswho arguably needed them most, but in the bank accounts of the top 10 per cent6.

The policy mix that came with the tax cuts has failed to deliver the boost to US employment that the Republicans said it would. Instead, thetrade and federal budget deficits have soared while unemployment hasgrown by nearly two million people. Between 2000 and 2006, theRepublicans cut taxes twice. Now the level of public debt has risen by 44 per cent and unemployment in 2005 stood nearly 1.9 million higher than at the end of 20007.

With fewer in work, poverty has grown. Figures produced by the US-based Centre on Budget and Policy Priorities show that poverty levelshave risen consecutively since the first tax cut in 2001. They now stand 1.4 per cent higher than levels in 2000 – the first increase in Americanpoverty for over a decade.


5 Message to Congress (Budget outline), February 27 2001, http://www.issues2000.org/2004/George W Bush Tax Reform.htm#856 Analysis of Third Bush-Kerry debate (FactCheck.org), October 14 2004,http://www.issues2000.org/2004/George W Bush Tax Reform.htm#247 US Bureau of Labor Statistics

This increase in poverty levels has been exacerbated by a fracturing ofthe safety net. With their economies soured and their budgets overstrained,local government, the states and localities have been hard-pressed tomaintain services for their most vulnerable citizens. In some, food deliveries have stopped and nearly a million Americans have lost theirMedicaid benefits in what the National Governors Association describe asthe worst fiscal crisis since the second world war. Indeed, an investigation by the Detroit News showed that the $600bn of tax cuts led to cuts in ‘jobtraining, housing, higher education and an array of social service’programmes8.

Alongside the tax cuts has come a return to rolling back the state inoften highly sensitive parts of the public services. In 2003, for example, statefunded professional drug and alcohol rehabilitation programmes werereplaced by ‘prayer groups’. In his 2003 State of the Union address Bushexplained this decision by saying: ‘Let us bring to all Americans who strugglewith drug addiction this message of hope: the miracle of recovery is possible,and it could be you.’

Cameron’s position is, of course, unclear. The Tory mood music played to the voluntary sector has been turned up a few notches in recent months.What has been interesting, however, is that the Tories have attacked whereLabour has constructed partnerships with the voluntary sector. This is


8 http://detnews.com/2004/specialreport/0410/03/a01-284666.htm

WISHFUL THINKING ON JOBSThe Bush administration has consitently overpredicted future job growth

140

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1251999 2000 2001 2002 2003 2004

Actual Nonfarm Payroll EmploymentFigures in millions

Administration Forecasts

127.5

138.3

135.2

132.7

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Bureau of Labor Studies, Economic Reports of the President, 2002, 2003 and 2004. (Originally published in the New York Times, September 3 2004.)

especially so of the New Deal, which, as Jim Murphy recently pointed out, isone of the best examples of government working together with ‘dedicatedvolunteers who are flexible and trusted by communities’9.

But Labour’s second and more important task is to set out our positiveagenda for Britain. We must be clear in our own minds that Cameron will attempt to redefine us as the ‘big state’ alternative. Cameron has to do this if he is to convince the public in 2009 that there is a ‘Tory-shaped’problem holding Britain back. All the signs are that this may prove to be the thrust of his attack, focused on civil liberties, ‘centralisation’, publicspending and ‘regulation’.

Labour has to approach this task with a focus on what the 2009battleground will look like. After the last election, there was one school ofthought which argued that, in the light of a one million-vote boost to theLiberal Democrats standing on a supposed ‘left-wing’ platform, it mightmake sense to tack to the left.

But closer analysis revealed a far more complicated picture, with manyformer Tories voting Liberal (three quarters of the 12 Labour losses to the Liberals were former Tory seats) and big swings to the Tories rather thanLiberals in the crucial south east. Critically, analysis of the battleground of 2009 reveals that, among the 100 most-marginal Labour-held seats, theConservatives are in second place in 88.

So our task at the next election is two-fold: to keep a sharp focus on theTories, explaining just how Conservatism differs from compassionate politics;but also win back disenchanted former Labour voters, many of whom leftLabour over the Iraq war in 2005.

This points to an agenda of fairness and freedom. This is an agendawhich underlines our values as a party but speaks of our ambition forempowering individuals and communities, equipping them to get the mostout of life in 21st century Britain. And in setting out this agenda we have toconstantly test the Tories – test them to follow us, or explain to the Britishpublic why not.

After eight years of work, Labour has helped create a country ofopportunity. In an era of globalisation and rapid change we are one of theworld’s most open economies. We are a hub of global trade. We have a world-class environment for e-commerce. Our bio-tech industry is secondonly to the US. After the longest unbroken record of economic growth since records began there are more people in work than ever before. But still not everyone has an equal chance to share in that success. And peoples’lives are changing: people are busier and need public services to workaround them; while families and communities are altering, breaking downtraditional structures of nurture, advice and support.

So our agenda has to articulate why progressive politics is not only fairer,


9 The Today programme, BBC Radio 4, Janaury 19 2005

but is strong enough to enable individuals to achieve a fuller measure oftheir diverse ambitions. Take health. In our first two terms our number onepriority was to fix our hospitals to bring down waiting lists. Now, with thelowest waiting lists ever and big advances in the battle against the big killerdiseases, Britain needs the NHS and our social care system to expand andchange. This will enable the NHS to support the broader progressive goals ofhelping to make sure that everyone is well enough to get the most out oflife: with a new generation of pensioners living longer, thanks to advancingmedical technology; better care and an attack on age discrimination; andhelping an estimated 17 million people who live with long-term conditionssuch as diabetes, heart disease or asthma.

But, within a fair tax-funded system, we can deliver greater control andinfluence to individuals and communities. If we are to create a social careand health system in this country that empowers people to get the most outof life, we need a system that is based on people power. On the one hand,giving people the power of choice and control over the kind of careavailable; and on the other, giving people a much bigger voice in how things are organised where they live.

In social care, we are already testing individual budgets: a powerful new way of bringing together six – and, in time, maybe more – sets ofbenefits to create a single account which people can decide how to spend.This may be to pay a relative to act as a carer, rather than simply usinginappropriate services that just happen to be what is on offer where theylive.

In health, ‘practice-based commissioning’ will give an individual’s GP or practice nurse new access to a much bigger slice of their patients’ NHSbudget, plus the flexibility to spend that budget as they and their patientssee fit. Not just serving up what happens to be on offer, but adapting andinnovating based on unique individual needs. Savings will be reinvested in a stronger service, on good old-fashioned mutual principles. The newhealth white paper promises a range of new ways for communities orcouncillors to trigger improvements if services do not come up to scratch.

You don’t have to look far to see the tests for the Tories. Will theycommit to our levels of funding? Will they match our commitment to targethealth inequalities set out in our neighbourhood renewal strategy? Or willthey seek to remove the word ‘inequality’ from the face of anything we do,as they tried to do during the committee stage of the childcare bill?

If they want to abolish targets in the NHS, will they abolish our goal toreduce waiting times to just 18 weeks? Will they abolish the NationalService Frameworks which have done so much to tackle age discriminationin the provision of health and social service care? The Tories say they areserious about public health. But the strength of David Cameron’scommitment appears to be a plea to WH Smith’s not to sell chocolateoranges at the checkout.


It was Nye Bevan, the founder of the NHS, who said, on the penultimatepage of In Place of Fear, that ‘progress is not the elimination of struggle, but rather a change in its terms’. With a new Tory leader in place, a newelectoral landscape, a different Britain in part shaped by Labour’s progressivevalues in two terms of office, the terms of politics are changing. We willhave to renew with them – but this time in office.

LIAM BYRNE is MP for Birmingham Hodge Hill and is Parliamentary Under-Secretary of State at the Department of Health


The enabling state

David Cameron is trying to bring the Conservatives into the politicalmainstream. That raises three questions for Labour: will his party lethim move; does he believe his centrist rhetoric; and how do werespond?But Tory MPs and members are likely to cause him difficulties, because

their instincts remain robustly Thatcherite – as do his. Nonetheless, the newTory leader knows that he has to try and shift the dividing lines between theparties. So he will try to appear as close to Labour’s political position as he can. The danger of this imitation strategy, if he sticks to it, for Cameron is that hewill end up with no political differentiation from us. If he is agreeing with ourvalues, we can convince the public we are best placed to deliver on them.

Cameron has borrowed his ‘compassionate Conservative’ label from George Bush’s Republicans. Liam Byrne’s essay in this pamphlet shows wherethat took America – the rhetoric may have been compassionate, but the realityhas been conservative. Cameron’s team and supporters may admire theRepublicans’ values, but Cameron and his chief spindoctor Steve Hilton are also seeking to copy Labour’s tactics between 1994 and 1997. It’s said thatimitation is the most sincere form of flattery, but at times it’s made me cringe:did we ever stoop as low as attacking Terry’s chocolate orange?

However, the values and tactics are dissonant. When I listen to Cameron,there’s something unconvincing about the content and delivery; like a foreign-language student repeating words learnt by rote off a CD. In 1994, no one doubted that Tony Blair had centre-left instincts. I’m not sure that’strue of David Cameron.

It’s certainly not true of his party. We only need to listen to Iain DuncanSmith, Cameron’s incongruous choice to lead the policy group on social justice. He told the Today programme: ‘I accept that the state has a role in all of this which is to guarantee … the safety net … their minimum guaranteewhich is that we will never allow people to fall below the level that allowsthem to sustain a basic quality of life. But the problem for the state is thatbeyond that [it] is too broad an instrument to be able to deal with individuals.’1

So there is no role for the state beyond being a safety net, because publicspending ‘often damages constructive behaviour’ and government is ‘in part,part of the problem’. The way to tackle poverty is to slim down the welfarestate and expect voluntary groups to fill the vacuum. This isn’t centrist – it’s as right wing as anything Margaret Thatcher would have said at the height of her power.

And there’s a problem with this vision. It hasn’t worked anywhere in

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1The Today programme, BBC Radio 4, January 18 2006

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the world. It’s not an anti-poverty policy. It’s what politicians say when theywant to cut public spending but don’t want to admit the poor will suffer.

So David Cameron may already be starting to worry about where the socialjustice policy group is heading. And he should also worry about what-on-earthJohn Redwood will come up with as co-chair of the group on economiccompetitiveness, given that he’s on record as saying that taxation is not just ‘legalised theft’ but ‘immoral’2.

Indeed, it’s worth noting the odd choice of individuals that Cameron hasmade to lead his policy groups. If I were trying to banish the ghost ofThatcherism, I wouldn’t appoint Iain Duncan Smith to anything, or indeed a bunch of ex-Tory ministers. Are John Redwood, Peter Lilley and MichaelForsyth really his idea of a centrist future? It’s as if Neil Kinnock had putGeorge Galloway, Derek Hatton and Arthur Scargill in charge of the 1987policy review. Cameron may come to regret having entrusted the task ofburying Thatcherism to its political heirs.

Perhaps Cameron’s tactic will be to make a virtue of dumping any of thegroups’ conclusions that don’t test well with focus groups. After all, he’s alreadyditched the policy on health vouchers that he put in the last Tory manifesto. I think he’s also dumped George Osborne’s bright idea of a flat tax, although it’s hard to keep up with the various u-turns. And he’s even got rid of his own favourite policy, as shadow education secretary, of a return to grammarschools by the back door.

So while Cameron’s party may cause him difficulties, we should prepareourselves for him trying to make a virtue of ignoring them. That leaves theintriguing question of what Cameron himself believes. For one view of this, we can turn to yet another one of his policy group leaders, Zac Goldsmith, whotold the Guardian on the eve of Cameron’s election as leader: ‘I’ve met Davisseveral times. I don’t know Cameron. Even if his views are opposed to mine, I think he is more electable … Rory Bremner described him as a political iPodon which you could play anything. I hope that is true. I hope I will be able to infect him with environmentalism. It may be a complete waste of time.’

So does Cameron believe his own rhetoric? Is he a political iPod, asGoldsmith hopes, or a faithful Thatcherite? I believe that his instincts remainThatcherite: the ghosts of the flat tax, the patients’ passport and a return togrammar schools are testament to that. But Cameron will try to hide theseinstincts. He will try to make saying he wants to tackle social injustice the testof whether he’s a new type of Tory, rather than having the policies to deliver that aspiration. He will seek to trim the unpleasant edges off Conservativepolicies – even if he came up with them originally. He may play at being theiPod, but he marches to an older tune.

Our first response must be to point out this inconsistency: that someonewho is happy to change policies, to flip-flop from one position to another, is


2http://www.epolitix.com/EN/MPWebsites/John+Redwood/F99070AB-4A19-4F16-B9CF-B9F556A541D9.htm

either lightweight or hiding right-wing views which he knows to beunelectable.

Second, we should not vacate the centre ground. That would ignore thehistory of the last Tory government, which reacted to a reinvigorated Labourparty by trying to find clear blue water and heading off into the badlands ofeuro-scepticism and extremism. In 1994, that was music to our ears. We’d have been more worried if John Major had tried to return to the centristapproach of his early months as prime minister, because lack of differentiationcan be much more of a problem for an opposition. An opposition without itsown policies is basically relying entirely on the government of the day to fail.After all, why vote Conservative if all they do is agree with Labour? So ifCameron does end up trimming, our task will be simple: to continue toconvince the public that we have a vision for Britain, and the competence to implement it.

Competence is central to winning this argument. It’s why the Conservativesare setting the Labour party the trap of becoming bitterly divided over reform.Cameron aims to paint us into the statist corner Labour inhabited in the 1980s.That is why it is so important for us to stay New Labour: so that he cannotaccuse us of believing in big-state solutions for their own sake, and so that wecan argue for the importance of a flexible, enabling state. We should remainfirmly pragmatic about means, because we are so passionate about ends. If private providers can reduce the amount of people waiting in pain for anoperation, it would be immoral not to use them. If choice and diversity inschools will raise standards and improve fairness, we should not shy away from them either.

Winning the argument for the proper role of the state is particularlyimportant given that, as Liam Byrne rightly points out, for many voters at the next election, the idea of a Conservative government will be somethingthey know only from history books. But 1997 wasn’t just the rejection of Conservative personnel, it was also a rejection of their philosophy: inparticular the idea that the solution to Britain’s problems was smaller andsmaller government; the philosophy whose flame Iain Duncan Smith keepsalive so effectively. That is why it is so odd that Cameron too cannot stophimself attacking the state.

That is one dividing line the new Tory leader seems stuck on. He regardsthe state as part of the problem; we regard it as a part of the solution. He sees voluntary groups as an alternative to public services; we see the two aspartners. We believe that the state can do more than provide a basic safety net. We believe that a modernised state can empower individuals. We believethat, without such an enabling state, the promise of using the voluntary sectoror social enterprise is a hollow and deceitful cover for an approach that has no real intention of tackling social injustice.

But the importance of the enabling state isn’t limited to public services. It can also be seen in dynamic sectors of the economy like the creative

The enabling state 15

industries. These now account for eight per cent of GVA, and have beengrowing at twice the rate of the rest of the economy as a whole. They employ300,000 more people now than they did in 1998. In London, they are creatingmore jobs than any other sector, and are now the second-largest employer.

Of course, this success shows that it would be damaging for government to seek to interfere in detail in these sectors. Our role is not to pick winners,but to create the right framework for the market to thrive. An enabling state is vital to this. It is vital to ensuring competition: without effective regulation,competition will be restricted and new companies will be handicapped. That is why it is so important that Britain now has a competition regime as effectiveas any in the world.

But the enabling state also helps to support the creative industries in other ways. Studies of countries and cities with successful creative industriesshow that having the right balance between public investment and privateenterprise is crucial. Open markets are the sine qua non. But creativity inschools and at university matters. Public service broadcasting and world-classarts organisations matter. Business support and training matter.

That’s why the Treasury recently announced new tax breaks for the filmindustry that will make Britain as attractive a place to make films as any in the world. And that’s why it’s so important that we renew the BBC’s charterfor 10 years, making the BBC more accountable to licence-fee payers, but alsohelping it to pioneer new services on broadband and digital television. And,finally, that’s why it’s vital that we help everyone get digital television, byswitching off the current analogue signal. Digital switchover will help Britain’smedia industries grow, but it will also make sure that we don’t leave behind a minority of the population without access to these new services.

Governments do not run creative businesses. But a negligent state coulddamage them. An enabling state, in contrast, can support their internationalcompetitiveness in a sector of the world economy that will continue to grow.

If the Tories are learning from 1994, then so should we. The Majorgovernment was probably doomed anyhow, because it was (and was perceivedto be) deeply incompetent. But they made it worse in responding to NewLabour by moving further to the right. We should avoid that mistake, andmake the battleground for the next election: which party has the vision andcredibility to deliver on its values? In contrast to the Major government, wehave a record on public services of which we can be proud. As long as wecontinue to deliver improvements that meet the public’s expectations, andconvince them of our vision of the enabling state, we can trump Cameron’sspin with Labour’s record of substance.

JAMES PURNELL is MP for Stalybridge and Hyde and Minister for Creative Industries and Tourism at the Department for Culture, Media and Sport


Empowerment: a Labourvision for public services

Implicit in many of the criticisms of the government’s reform programme is the idea that we have exaggerated the scale of change faced by publicservices, in order to legitimise policies actually motivated by electoraltactics, or a deep ideological mistrust of the public sector.What then are the challenges faced by the public services? First, there are

the demographic shifts such as population ageing, mass migration and growingethnic and cultural diversity, the rise in women’s employment and decliningdominance of the traditional family form. Second, there are trends in publicexpectations and attitudes: declining deference towards certain forms ofauthority, particularly democratic institutions; the deepening of a rights-basedculture; and the rise of new kinds of concerns and tensions around issuesranging from identity to science and the environment – a heady mix drivenand reinforced by a 24-hour mass media which often appears to be engaged in a conspiracy to maintain the population in a state of self-righteous rage. The challenge is for public services, created or expanded on the assumption of a uniform provision to a relatively compliant, homogenous population, to adapt to meet the complex needs of a diverse and assertive population.

The second set of challenges lies in the tendency for the costs ofdomestically produced and consumed services to rise in comparison to thosesectors where it has been possible, through technological advance andinternational competition, to replace labour with cheaper labour, or with evermore cheaply produced machines. Without major advances in public sectorproductivity, taxpayers will face higher bills to pay for the same level of output.

There is huge potential for major improvements in public sectorproductivity through the application of technology and of improvedmanagement. We are already beginning to see this in areas as diverse as HM Revenue and Customs and the growth of day case surgery in the NHS. As well as the constant striving for greater efficiency in back-office functions,the future could hold major advances in areas like distance learning ortelemedicine. But we are still at an early stage of understanding, let aloneexploiting, this potential. Public service reform should seek to create thecircumstances most likely to foster continuous innovation and improvement.

The economic challenge gives rise to the political challenge. I welcome theapparent conversion of today’s Tory party to the case for strong public services.It is a compliment to New Labour that the Conservatives do not feel able toattack us, as they did in earlier times, for being the defenders of producerinterests, unable or unwilling to accept the need for reform. However, it wouldbe wilfully complacent to believe that the political challenge to public services

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has gone away. As personal prosperity continues to rise, more people maycome to feel they can provide health and education or security for themselves,and thus be less inclined to support tax-based universalism. In this context,collective support for strong public services can be fatally undermined if it lookslike the government’s priority lies not in ensuring those services meet people’sneeds in a changing world, but instead in protecting public services and publicemployees from the impact of change.

The fourth challenge is technology and, in particular, access to information.Publishing school league tables and NHS performance data is still controversial.Our systems of measurement could no doubt be improved. David Miliband has, for example, recently said that we should use citizen satisfaction as the key measurement of service performance. But surely the point is not whetheror not greater access to information about service standards is a good thing – the point is it is inevitable. Look at the NHS: it is not the Department of Health that is the most used source of information on performance but the Dr Foster website.

Fifteen years ago, if your doctor told you had a rare condition, you mighthave found it hard to get any information. Now you can go to any number of websites. Fifteen years ago, you might never have known that in Californiaor Beijing an experimental treatment was making progress against yourdisease. Now you will be directed to the relevant newspaper and journalarticles in your Google search. Fifteen years ago, it might have taken months to find other people in the same position and months more to get them to allmeet somewhere to discuss support and campaigning. Now, connections can be made, networks built and national campaigns launched in days, withoutanyone coming face to face.

So these are the challenges. This is the reason – not political tactics, notsome kind of search for a political legacy, not reform for reforms sake – that we continue to maintain the pace of reform.

While remaining confident of the core values of public services, our modelof reform seeks to change the way public services work in two fundamentalways.

First, working with public service managers and providers, we are trying to achieve what could be seen as a Copernican revolution. Instead of citizensorbiting around services, we must place the individual and the community – their needs, choices and opinions – at the centre, with services orbitingaround them.

Second, we need to move from a mechanical to an organic or whole-system model of change. Instead of relying on the traditional staccato rhythmof re-organisation followed by inertia followed by reorganisation, our aspirationshould be public services that hum with the beat of continuous self-improvement.

This model of change, driven from the bottom-up by the views, choices and actions of service users and citizens, is a radical answer to the radical


challenge I have outlined. In a fast-changing and complex world, it becomesever harder for the centre to usefully drive change: it is too leaden footed, too far away from what is happening. So the users themselves have to be the architects of the service.

As we search for gains in public service productivity, the aim is a system in which user choice and voice is not just a way for me to get what I want, but a means of driving continuous improvement across the system. Instead of a zero-sum model, in which, if I get something, I must be denying it tosomeone else, a positive-sum model where the service I am offered is shapedand improved by the preferences of my fellow citizens. In its antagonism to the use of market mechanisms in the public sector, the left fails to see theprogressive potential of providing people with choices, based not on power or wealth but on citizen rights and entitlements.

In this world, information is not something to be hoarded and protectedfrom the prying and ignorant eyes of the public – and, let’s face it, for a longtime that was the default view of public administrators. Instead, it is a crucialresource empowering citizens in their choices, inspiring managers to improveperformance and opening up public and professional debates about what worksbest. Politically, the opportunity is to move away from an adversarial publicsector discourse in which citizens are encouraged into a passive aggressivestance – ‘I have no power and you are all to blame’. Instead, our goal is anempowered public seeing public services as a co-production depending on theinput of the citizen as well as the service. This is a citizenry which sees thatdebates about what can and cannot be afforded or provided are difficult – butinevitable and healthy.

So this is the vision of how public service can not only survive but thrive in this new world. How we deliver this vision is as simple to describe as it iscomplex to design and implement. At its heart it is a system that seeks tocombine three sets of change drivers – from the centre-down, laterally, andfrom the bottom-up – to produce a dynamic self-improving system.

If you look at any major public service you will see debates taking placecovering the four questions posed by this model.

First, how do we get the centre right – slimmed down, strategic, with fewer measurements and less intervention? Instead of a centre that sees itselfturning the handles on a huge machine, a centre that sees itself feeding andtending an organic system of change.

Second, how do we get the lateral change drivers right through generatingdiversity, contestability and information exchange? The idea here is notcompetition for its own sake, but a system with scope for innovation, learningand challenge. Contestability is not just about bringing in the private or thirdsector; it is also about spreading success in the public sector, as in schoolfederations. While provider-commissioner splits often make sense, there are also cases when it is important to maintain some vertical integration.

Third, what is the right mix of choice, voice, consultation and devolution


to drive improvement bottom-up? This is the question behind lively debatesabout the use of individual patient choice in health, the role of the collectivechoices of parents and governors in schools, and the ways of strengtheningcommunity voice in relation to local police priorities.

And finally, of course, the hardest question of all: How do you get thesedifferent drivers to work together in the system as a whole?

Public service reform is a huge and complex endeavour. To be pursuing so many dimensions of change in so many different public service areas is the kind of governmental strategy Sir Humphrey Appelby would have called‘very brave’. Have we got it completely right? Of course not. But, in our basicanalysis, in the essence of our vision and in the key elements for reform, I sense a growing consensus – at home, and among the many admiringinternational observers of our reform programme.

The debate about our reform programme will continue. In particular,government should listen carefully to the voices of those at the front line ofservice delivery. Change will be so much more likely to succeed if public serviceemployees feel they are the active participants – not victims – in the process.

But, while listening to the voices of service providers and users, it is alsoimportant to carefully explore some of the more fundamental objections to the reform programme.

I have addressed the objections that public services are not really facingmajor change. A different critique, focussing on the engagement of the privatesector in public service delivery, involves a confusion between the essentialends and principles of public service and the contingent means. Byhypothesising a pure public service ethos being perverted by the motives of the private sector, those who make this argument often fail to recognise theway public services have been, or are now being, delivered. For example, on the eve of the white paper on primary care, the Royal College of GeneralPractitioners spokeswoman said: ‘I’m not sure I pay tax so that people can pick up their prescription when they are doing their shopping.’

But there are two rather more insidious assumptions in some peoples’concerns. The first I would call the ‘lump of quality’ fallacy. This assumes thatthere is a fixed amount of good provision in a system, and the job of politiciansand administrators is to distribute that fixed sum fairly. Of course, in normativeterms this is true: there can only be one top performer. But what users caremost about in most services is not whether the service they receive is betterthan that received by others, but whether the service meets their needs andwhether it is improving.

‘Lump of quality’ critics implicitly rule out the possibility that a dynamicsystem can generate a greater sum of quality; a possibility demonstrated by the facts of improving pupil performance, or cancer and heart disease survivalrates. The problem with the ‘lump of quality’ fallacy is not only that it is weakempirically and theoretically, but also that, were it true, it would be disastrouspolitically. Progressives by definition need to believe in progress; the ‘lump of


quality’ fallacy is deeply pessimistic.Finally, there is the argument that the very attempt to empower citizens

is bound to favour the middle class and disadvantage the less well off. This is a serious concern but I think it is misguided. First, it ignores the fact thatbetter-off people have always and continue to get the best out of the system.Second, this critique tends to see the problem as middle-class people being toopushy, rather than working class people not being pushy enough. Ironically,when the comprehensive system was first established, one of the argumentsmade for it was that it would make middle-class parents advocates ofimprovement in every school.

Third, it underestimates the ways in which empowerment strategies can be targeted in particular at less privileged groups. For example, in both thehealth reforms we are implementing and the ones we plan for schools, we are providing additional support to make sure everyone understands theirentitlement to choice and voice and how to exercise that entitlement. The best public services being colonised by the most vocal and self confident is not an intrinsic flaw with our plans, but a long term failing which welldesigned empowerment strategies can at long last start to address.

If progressives spend all their time arguing over the techniques of reformand trying to wish away the inevitable, they risk losing by default key debatesabout how the very idea of public service must adapt in the decades to come.

Over the decades, we can expect significant changes in the boundaries ofthe state’s responsibilities. The development of new treatments, and debatesaround whether the NHS should provide access to treatments ranging fromfertility to cosmetic surgery, means these issues have long been debated inmedicine. Less discussed, but arguably more significant, has been an importantshift under New Labour in the boundaries of the state’s responsibilities forchildren and education. This has been an evidence-based and value-based shift. The evidence of the clear benefits to the individual of participation inhigher education, along with the clear need to invest more in the universitysector, led to variable tuition fees as part of a policy that provides extra supportto the poorest. Evidence of the vital importance of the early years on lifechances and tackling disadvantage has led the government to prioritise thisarea for investment.

Coherence is not just an academic goal: for the public to feel that theboundaries to the state are sensible and fair it is important to maintain publicsupport. Progressives must be willing to address the difficulties posed by thequestion: how can we best use public money to maximise equity andopportunity? As we think of the tough spending review ahead, we have to beas willing to identify existing areas of low priority as new areas of high priority.

There is another important debate about the boundaries between the stateand the individual. This concerns the expectations that can be placed uponpeople as part of what might be termed the ‘public service contract’. Inlaunching the welfare reform green paper, John Hutton described a more


ambitious contract between the state and the individual in terms of supportand conditionality for those on incapacity and other benefits. A week earlierwe saw a Respect plan which muted the possibility of greater conditionalitybeing applied to housing and benefit entitlement, but also implied thatcommunities which organise and fight back against crime and anti-socialbehaviour will be more able to call upon the resources of the local council and police.

Progressives should welcome greater reciprocity and a stronger frameworkof entitlements and expectations into the contract between state and citizen.The aim here is not – as it is too often presented – merely punitive or aboutrolling back the state, but to ensure that state action empowers individuals to take control of their lives. It is about how we can blur the boundarybetween state action and civic action and how we can achieve a public servicemultiplier effect whereby the value of the outcome we get is greater that thevalue of the investment we make.

The critical challenge and opportunity for public services is less aboutstructures or systems and more about relationships. For most people, the public service ethos is not perceived as a function of ownership but as acharacteristic of an interaction. All of us can think of occasions when publicservice interactions have left us cold, and times when they have enthused andinspired us. Let me go further and suggest that, where the interaction workedfor you, there was a tangible sense of common purpose with a public serviceprovider seeking to do the best both for you and for others.

It is here – not in falsely polarised or technical debates about the preciselevel of contestability in service provision – that there is an importantdistinction between the purpose of the democratic state and of the privatemarket. One way I have heard this put is that, while the market is a place inwhich I seek to get ‘the best for myself’ as an individual, the public sphere isthe place where I seek to achieve ‘my best self’ as a citizen. In abstract, I can be healthy, educated and safe while no one else is; but the public service ethoscaptures the progressive belief that full well-being can only come about in a society which attends to the well-being of all its citizens. For reformers, it is in a devolved, diverse, people-driven service that this sense of commonpurpose can be most richly fulfilled.

I want to end with a more explicitly political point. Sitting in No 10, as arguments rage about school reform, NHS restructuring and evencontestability in the criminal justice system, I realise that for some people the government is seen as intent on destroying the progressive legacy of the post-war government. I don’t agree. I think that what we are doing isabsolutely necessary to protect that legacy. But more than that, I think we have the opportunity to overcome the great 20th century flaw in Britishprogressive politics. This is the divide between the advocates of equalitythrough distribution of resources and the advocates of empowerment thoughthe dispersal of power.


By bringing empowerment to the aid of public services and by using public services to empower, I think we have the opportunity to develop a more powerful political and policy paradigm.

The other day I rediscovered the following extract from RichardCrossman’s diaries:

I’m afraid very few members of the cabinet believe in participation. I learnt the philosophyfrom Tawney and Lindsay who taught me that social democracy consists of giving people achance to decide for themselves – that’s the essence of it. This philosophy is extremelyunpopular, I find, with most members of the cabinet ... The notion of creating the extraburden of a live and articulate public opinion able to criticise actively and make its ownchoices is something which most socialist politicians keenly resent.

Four decades have passed since Crossman wrote these words, but we still havea long way to go in our politics and our policies. (In particular, politicians needto think more self critically and more radically about how the idea ofempowerment can be applied not just to public services but to the way we dopolitics itself.) As soon as we think we have got reform right, new challengeswill bear down on us. Continuous, complex change is the USP of modernity.

But when I think of Patricia Hewitt publishing a health white paper directlyinfluenced by the biggest and most sophisticated government consultationexercise ever; when I talk to the parent of a player in my son’s Sunday footballteam who now chairs the governors of an academy established by parentsthemselves; when I see the early success of a direct payment scheme whichputs unprecedented control over services into the hands of some of our mostvulnerable people; when I hear David Miliband’s ambitious ideas forneighbourhood governance; then, I don’t say ‘we have got there’, but I do say ‘we are on the way’.

MATTHEW TAYLOR is the prime minister’s chief adviser on strategy.This article is an edited version of a speech delivered at the Guardian Public Services Summit in January 2006


Fairness and freedomLiam Byrne

The enabling stateJames Purnell

Empowerment: a Labour vision for public services

Matthew Taylor

83 Victoria StreetLondon SW1H 0HWTel 020 3008 8180Fax 020 3008 8181Email [email protected] Website www.progressives.org.uk

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